British business confidence at 21 year low
February 11, 2013, 9:12 pm

GDP in Britain shrank by 0.3 per cent in the fourth quarter of 2012. [Getty Images]

Britain’s businesses had the lowest confidence in 21 years in January this year, accountancy firm BDO said in a survey.

BDO’s optimism index fell to 88.9 in January, far below the score of 95 needed to indicate growth, which is the lowest level recorded since the survey was launched in 1992.

The economy achieved zero growth last year as a whole.

After the economy shrank 0.3 per cent in the last three months of 2012, Britain could be on course for its third recession in four years.

BDO said it suggests the economy will struggle to grow in the first quarter of this year, although the country’s labour market has continuouly showed signs of improvement.

BDO’s partner Peter Hemington said: “It seems the damaging effects on businesses of five years’ zigzagging economic growth has left them wary of making concrete plans for expansion and resigned to the ‘new normal’ of economic stagnation.”

The survey by BDO estimates confidence in business performance and the economy over the next six months.

Britain’s economy is widely expected to return to recession this year, after its GDP shrank by 0.3 per cent in the fourth quarter of 2012.

Its economy has seen consecutive negative growth since the fourth quarter of 2011 before the London Olympics was held in the third quarter.

This is the eighth consecutive month that the index has remained below the 95.0 mark.

57 founding members, many of them prominent US allies, will sign into creation the China-led Asian Infrastructure Investment Bank on Monday, the first major global financial instrument independent from the Bretton Woods system.

Representatives of the countries will meet in Beijing on Monday to sign an agreement of the bank, the Chinese Foreign Ministry said on Thursday. All the five BRICS countries are also joining the new infrastructure investment bank.

The agreement on the $100 billion AIIB will then have to be ratified by the parliaments of the founding members, Chinese Foreign Ministry spokesman Lu Kang said at a daily press briefing in Beijing.

The AIIB is also the first major multilateral development bank in a generation that provides an avenue for China to strengthen its presence in the world’s fastest-growing region.